managing channel relationships

• channel conflict: the actions of one channel members is precieved as reducing the ability of another to achieve goals 
• mannaged using channel design contracts 
• channel power: when one channel member has influence over the behavior of othe channel members
• channel conflict: occurs when channel members have inconsistent goals 
• vertical conflict: disagreement among channel members that buy and sell to one another 
• exclusivity 
• territial enchroachment 
• example: samsung wants best buy to exclusively carry all it's t.v's but not those of competition brands 
• horizontal conflict : discord among members at the same level 
• price war among retailers of the same product 
• example best buy and sears engage in price war for samsung tv's 
• power: when one channel member has influence over the behavior of other channel members 
• managing channel power; contracts provide a legitamate means of managing power in channel relationships 
• 
  

• the impacts of climate change,water scarcity and availability of raw materials and oil is affecting the production and affordability of food 
• ways of marketing channels add value 
• reduce number of transactions 
• increase value for consumers 
• more efficient and effective operations 
• without marketing channel, consumers would be forced to 
• find raw materials,
• manufacture products
• direct vs indirect strategies 
• direct marketing channel - no intermedierise i,e, GAP 
• inderect channel - has intermediariees 
• one intermediaries - car dealerships 
• two intermediaries - beer companies wholesale, retail, consumer 
• design marketing channels : retailers, role of distrubution centers versus direct store delivery 
• benefits of distrubution centers 
• store merchandise until the next link in the chain is ready for it 
• prepare floor-ready merchandise 
• adds to overall efficiency - distribution centers use sophisticated routing and scheduling systems 
• logistics: movement of products through channels 
• concerns for: timeliness, consistency, quality, efficiency, sustainability 
• vendor-managed inventory: transaction data sent directly to manufacturer: order for new merchandise; vendor- managed negotiation 
• just in time inventory systems: coordinate deliveries between distrubution center: corporate-managed negotiations 
• inventory managment strategies: pull vs push marketing 
• push: producer centric
• maxamize production ( high inventory) 
• products with stable demand 
• pull 
• customer centric 
• resellers order from manufacturer based on consumer demand 
• products with uncertain demand 
• manufacturer focus: influence consumer demand 
• 
  

• everyday low price - emphasizes the continuity of retail prices lower than what the competition may offer 
• high/low pricing - relies on sales promotion, during which prices are temporarily reduced to boost sales 
• market penetration pricing - low initial price in order to attract a large number of buyers and win a larger market share 
• regular price later 
• price skimming 
• high initial price in order to appeal to customers willing to pay higher prices to obtain a new product or service 
• lower price when sales slows 
• consumer behavior and pricing: lessons from behavioral economics 
• people tend to behave irrationally in a predictable fashion 
• consumer behavior and pricing: anchoring 
• consumers are comparative thinking to make decisions 
• consumers are distracted by options 
• decoy pricing strategy
• consumers are distracted by options 
• people tend to have a change in preference between two options when presented with a third person option 
• strategic rccomendations 
• offer 3 options 
• include the one you want people to buy in the middle 
• charm prices have an end on the 9 
• sale price markers with the old price mentioned were more powerful
• dishes with a number-only prices are percieved to be less expensive 
• deceptive price advertising - luring customers into the store with deceptive pricing information
• predatory pricing - occurs when a firms set prices low with the intent to drive its competition out of business 
•  price fixing - occurs when firms collude to control prices 
• 
  

pricing concepts and establishing value

• 5 c's of pricing 
• the overall sacrifice a consume is willing to make to acquire a specific product or service 
• succesful pricing strategies are buit around the 5 components 
• comprpany pricing obojectives 
• profit oriented - maximizing profits or reaching a target level  
• sales oriented - the aim to improve market share - set prices low temporarily, generate new sales; and take sales away from competitors 
• competitor oriented - prices set according to the competition, competitive parity, status quo 
• customer oriented - focus on customer expectations by matching prices to customer expectations 
• customers 
• economic theory: price-demand 
• changes in price affect demand 
• assessing customers' sensitivity to change in prices 
• demand increases as price decreases 
• when you have a lot of suppliers they are able to meet the demand then price will go down 
• the price-demand relationship is different for prestige products/services 
• demand increase as price decreases 
• demand decreases as price decreases 
• customer sensitivity to price changes = price elasticity of demand 
• measures the extent of the effect of price on the consumers demand ( purchase behavior) 
• income effect - change in income effects the quantity of a product demanded by consumers 
• substitution effect - the price of substitution effect the quantity of a product demand by consumers 
• cross-price elasticity : the effect of a change in the price of a product A on the demand Product B 
• Cost 
• Variable cost - cary with production and volume ( materials and labor costs) 
• fixed costs - uneffected by production volume - factory costs (e.g. rent, utilities, executive salaries)
• total cost - sum of variable and fixed costs = variable costs + fixed costs  
• break even point- just enough revenues to cover total costs 
• Channel Members - Manufacturers, wholesalers and retailers can have different perspective on pricing strategies 
• i.e. concerns for slaes versus image 
• manufacturers must protect against gray market transactions 
• where a product is bought and sold outside of the manufacturer's authorized (intended trading channels) 
• manufacturers,wholesalers and retailers can have different perspectives on pricing strategies 
• competition 
• monopoly- one firm control the market 
• oligopoly - a handful of firms control the market 
• mopolistic competition - many firms selling differentiated products at different prices 
• pure competition - many firms selling commodities for the same prices 

October 19,2016

• the diffusion of innovation model - explains how new ideas and technology spread through society over time 
• assumes inovations spread through 5 distinct categories of adopters 
• innovators 
• early adopters 
• early majority 
• late majority 
• laggards 
• this helps marketers predict which types of consumers will buy their products/services 
• innovators - 2.5% of consumers - they seek out new products; buyers who want to be the first to have the new product or service 
• early adopters - less venturesome; will wait to purchase after careful review 
• early majority - risk averse; tend to wait until the bugs have been worked out before purchasing 
• late majority - purchase the product after it has achieved its full market potential (saturation) 
• Laggards - avoid change: rely on traditional products until no longer available; may never adopt a certain product or service 
• innovators " i want to be the first to get this new product" 
• early adopters " this new product is great" 
• earl majority " i heard that the jones' have one" 
• late majority " i found it at TJ Maxx yay" 
• laggards "what new product"... Do I have to?"
• factors affecting the rate of diffusion 
• different products diffuse at different rates 
• various factors increase the speed of diffusion of a new product 
• factoring affecting product diffusion - relative advantage - compatibility - observability - complexity - trialability-
• the product life cycle - defines the stages that products move through as they enter, get established in, and ultimately leave the marketplace

Chapter 11

• vaeline
• cleanex
• chapstick
• white out
• Jacuzzi
• Kawasaki
• ziplock
• all have strong brands which are synonymous with the product itself
• people will not look for your product
• what is a brand ? What are its functions?
• A brand is a name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate thm fro those of other sellers
• key brand elements
• characters
• slogan
• design
• jingles
• name
• advertising
• marketing
• logo
• color
• advertising and marketing is binding elements that must align wit the company
• brands
• facilitate purchases
• establish loyalty
• protect from competition and price compet
• ition
• reduce marketing costs
• are ( intangible) assets
• impact market value
• brand equity - the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself.
• brand equity is the difference between the market value and book value
• brand ownership
• manufacturer brands  ( national brands)
• owned and managed by the manufacturer
• " name brand"
• Private- label brands
• ( retailer/store brands
• products developed by retailers
• "generic brand"
• branding strategies
• naming product lines and brands
• individual brand name and strategy
• each product in the product mix is given a specific brand name
• family brand name strategy
• all or most products are associated
• the use of the same brand name for new products being introduced to the same or new markets
• more likely to be accepted
• brand dilution occurs when a brand adversely changes what they sell
• a contractual agreement between firms, where by one firm allows another to use its brand name, logo, symbols, and /or characters in exchange for a negotiated fee
• creation of a new look and feel for an established brand
• adjust a changing market preferences
• change a brand's focus to target new markets

product, branding, and packaging decisions

• product : creating value
• The right product to satisfy the needs of your target customer
• what is a product?
• anything that is of value to a consumer and can be offered through a vouluntary marketing exchange
• 3 key components
• core customer value ( basic problem- solving benefits sought by the customer )
• Actual product ( physical attributes)
• Associated Services ( Augmented product)
• types of consumer products
• convenience product - every day purchase i.e. groceries
• shopping product - a product that requires comparison  include shoes, appliances and apparel
• specialty product - spend the most time on the decisions - medical services, wedding gowns, antiques   
• unsought product - fire extinguishers, cemetery plots, new innovations
•  product mix - includes all of the products a company produces
• Product portfolio
• product line - A group of related items in a company product portfolio
• new flavors is an increase in depth
• benefits of offering multiple product lines
• protection against competition - reduced effect of competitors actions in any one particular area
• increased market growth and profits - market diversification
• offset sales fluctuations - seasonal variation
• Achieve greater impact- greater importance among consumers an channel members
• enable economical resource usage - spreading operational costs
• avoid obsolesce - security in the event that one of its product line reaches the end of its life cycle
• categories of packaging
• primary packaging - the layer of packaging in immediate contact with the product
• secondary packaging- the wrapper or exterior carton containing the primary packaging
• primary packaging - tube of toothpaste
• secondary packaging - box holding the tube
• key roles of packaging include
• attracting consumer attention ( design) - identifies/ differentiates product from competitors
• promoting updates - "improved formula" use of "sustainable materials)
• enhancing usage ( user friendly design)
• Adjustable to appeal to different markets - size offering - travel, convenience and bulk
• packaging functions
• enhancing functionality
• packaging - a subtly way of repositioning a product
• to appear more up to date
• to attract new target market
• product labeling
• more than just a sticker on the package, it's a communication too
• design with end user in mind
• information must comply with industry- specific laws and regulation
• product labeling regulation
• products must meet specific tests before placing terms such as "organic" or "made in the usa"
• 5 digit code starting with 9 - organic

• emerging methods of data collection
• in store analytics: how retailers track our movements
• trends in POS data collection
• Trends in-store analytics
• syndicated data - data purchased from another
• converting data into information
• describe
• review descriptive statistics ( percentages, means, standard deviation)
• Interpret
• explain and predict
• Action plan and implementation
• Research supported recommendations offered
• next steps determined and implemented
• ongoing monitoring of outcomes
• the marketing research process: new coke scenario
• why is coke losing market shares to pepsi
• how can they fix it
• step 3: data collection
• coke executives initially consult secondary sources for leads
• market analysts predict that any future growth opportunities in the soft drinks industry would likely come from younger drinkers
• based on this assessment, Coca-Cola executives develop and test a new formula
• step 4 : analyzing data and developing insights
• key finding of the test
• consumers like the taste of new coke over pepsi
• 53% of the loyal coke drinkers consumers like the taste of new coke over pepsi
• post implementation
• overwhelmingly negative consumer response
• consumer stockpiling behavior
• consumer boycotts
• consumer protest groups formed around the country
• boycotts of new coke
• songs written to honor "old" coke
• protests at coke events in Atlanta headquarters
• decline in sales
• original formula reintroduced - 75 days later
• coc cola classic launched
• losses recovered ( sales increased 10x )
• stock price increased by 35%
• both new and classic coke sold in stores initially
• old coke eventually removed from US market
• coca- cola received 31600 positive phone calls over the 2 days following the announcement of "classic"
• what went wrong?
• they didn't account for psychological attatchment
• taste was assumed to be the only deciding factor for consumers
• the symbolic value of original coke was overlooked
• was new coke's failure due to faulty or inadequate research
• failure was largely due to inadequate research

• 5 segmentation methods - geographic, psychographic, demographic, benefits, and behavioral
• 4 common targeting strategy - undifferentiated, differentiated, concentrated, micromarketing
• what does positioning refer to ? - positioning approaches - value, product attributes, symbol, competition
• competition - positioning their products in comparison with their competitors
•  marketing research : consisting of a set of techniques and principles for systematically collecting, recoding, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services or ideas
• marketing research increases decision making power by
• identifying the sources of business problems
• enhancing, understanding of market trends
• enabling strategic managerial action
• the marketing research process
• problem recognition
• defining objectives and research needs
• what is the problem that needs solving - why??? ... sales declines, loss of market share, customer dissatisfaction - evaluating the potential problems it could be
• what is the value of the problem -   
• what information is needed to answer the research questions
• Designing the research
• identifying the type of data needed
• determining the type of research necessary to collect it
• primary vs secondary data
• primary data: data collected for the first time to adess specific need
• secondary data: previously collected data available from external sources
• may be freely available
• secondary data: syndicated data insights : Mintel
• charred and smoked flavors excite appetites
• secondary data : scanner research
• involves data obtained from scanner readings of UPC codes at check-out counters
• retail sales research
• macro level data collection
• Point of sale data collection
• facilitates price experiments 
• micro-level data collection
• consumer reported  
• qualitative vs quantitative data
• qualitative data : descriptive data
• informal research methods
• generates " soft" information
• used to understand phenomenon of interest
• quantitative data : quantifiable data
• structured research
• generates statistically measurable information
• often used to confirm insights generated by qualitative research
• data collection
• secondary data - marketing data - primary data
• qualitative data : descriptive data
• informal research methods
• generates "soft" information
• used to understand phenomenon of interest
• observation
• in-depth interviews
• focus groups
• social media
• quantitative data: quantifiable data
• structured research methods
• generates statistically measurable information
• often used to confirm insights generated by qualitative research
• expirements
• survey
• scanner
• panel
• emerging methods of data collection
• in store analytics: how retailers track our movements
• rends in store analytics

Chapter 9

• The STP process segmentation
• targeting
• positioning
• marketing mix
• set strategy or objectives
• select segmentation
• segmentation: the separation of markets into distinctive groups based on similar characteristics
• 5 methods of market segmentation
• demographic grouping individuals in personal attributes i.e. age, gender, income, family size, occupation, religion, education, ethnicty
• geographic - location based factors  i.e. country, region, state, city
• psychographic - groping according to how they describe themselves i.e. lifestyle, self-concept, self-value (goals, personality, interests, opinions, attitudes 
• benefits - grouping based n the benefits derived from the product / service i.e. convince, economic, prestige : consumers can solve the problems in these categories with the product  
• behavioral - grouping based on actual behavior towards product i.e. user status, occasion, brand loyalty, readiness to buy
• geodemegraphic segmentation - the grouping of consumers on the basis of a combination of geographic, 

Chapter 6 : Consumer Behavior

• consumer behavior : The study of consumers and the processes that govern their selection, consumption, and disposal of products and services and the impacts that these processes have on the consumer and society 
• Reffered to as "the psychology of marketing" 
• 5 stages to the consumer decision making proccess model 
• step 1 : need recognition , functional needs and psychological needs
• functional needs: performance of the product or service 
• psychological needs: personal sense of gratification associated with the product or service  
• step 2 : information search : internal and external search 
• internal search : memory or prior knowledge 
• external search: everything but memory, marketing or non marketing
• consumer assesment of aternatives 
• universal set : all possible choices 
• retrieval set: brands ( or stores) readily remembered 
• evoked set: brands ( or stores) considered when purchasing
• ideally marketers want their brands and products to be in the consumers evoked set 
• step 3: purchase 
• when and where do I purchase 
• step 4: post purchase 
• satisfaction - customer loyalty ( repeat purchase), positive word of mouth 
• dissatisfaction - product returns, complaint/ negative word of mouth 
• buyers remorse - sense of regret or fear of having made the wrong choice, frequently associated with expensive items (i.e. house, cars)
• one strategy they use to alleviate buyers remorse is return policies and warranties  

• Conduct a situation analysis: SWOT Matrix 
• strengths - what is the firm particularly good at? 
• weakness -what areas are in need of improvement 
• Opportunities- what trends in the marketplace could exploit
• Threats - who are re they more the new competitors entering the market?. How fast are they growing? Are they more innovative? 
• Firms have the means to exploit the trends because they have the resources and knowledge to exploit it 
•    coca cola strength - Strong marketing and advertising, strong brand, world's largest beverage company
• weakness - over reliance on carbonated drinks, lack of diversification, negative publicity
• Opportunities- Growth in beverage consumption, increased demand for bottled water, reduced price of production material
• Threats - Changing user demand for healthier ( competitor) drinks 
• imitation products- coke maintains strong marketing and advertising   

Chapter 2: developing marketing strategies and market plan

• A market plan is a comprehensive blueprint which outlines an organization's overall marketing efforts 
• Step 1: Buisness mission and objectives 
• Step 2: situation analysis 
•  Step 3 : Identify oppurtunities 
• segmentation 
• targeting 
• positioning 
• Step 4 : implement marketing mix 
• culture - 
• product 
• price 
• place 
• promotion 
• Step 5 : evaluate performance using marketing metrics 
• Buisness mission and objectives 
• a mission statement is a broad description of a firm's objectives and the scope of activities it plans to undertake 
• Nike's mission statement " To bring inspiration an innovation to every athlete in the world" - BIll Bowerman 
• Google " To organize the world's information and make it universally accessible and useful" \
• Apple - " To make a contribution to the world by making tools for the mind that advance humankind' 
•  macro  (marketing) environments 
• culture - country v regional 
• norms jargan 
• political/ legal 
• political climate 
• laws / regulations 
• e.g FDA, FCC, SEC 
•  economic 
• economys performane 
• interest rates 
• inflation rates 
• consumer disposable income
• consumer demand and spending 
• business lifestyle 
• Technology 
• new products 
• new forms of communication 
• new retail channels 
• social 
• trends shaping values and shopping behavior 
• health conscious 
• green 
• thrifty 
• privacy concerns time-poor society 
• demographics 
• age gender roles 
• income distribution 
• education 
• ethnicity 
• geographic description